New Smart Data Council will tackle broadband 'loyalty penalties'

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The UK's Department for Business and Trade (DBT) has launched a 'Smart Data Council' that will aim to cut consumer bills. In particular, the Council will focus on helping both consumers and businesses find broadband deals and tariffs that are most suited to their needs. In addition, it will also aim to reduce the 'loyalty penalty' that customers face when they fail to switch providers. 

At present, a customer who switches to a new internet service provider (ISP) usually benefits from a big discount that has been designed to attract them. These discounts tend to involve either a signing up offer, such as a gift card or a reduction in the overall cost of a contract. 

However, once the initial contract expires, the monthly cost for broadband rises sharply and customers who simply allow their deal to rollover can end up paying around £15 per month more for their internet. Those who lock in a fixed-term deal and remain loyal also pay more as the best deals remain reserved for new customers. 

The new Council has already suggested that this loyalty penalty - the difference between what loyal and new consumers pay for the same service - currently sits at £1,114 a year for households across mobile, mortgages and broadband. 

Who is on the new Smart Data Council? 

The inaugural meeting of the new Council will take place on Tuesday 25 April 2023. It involves representatives from Ofcom, Citizens Advice, Ofgem, various government departments, the Open Data Institute and many more. The full list of Council members includes: 

  • The Department for Business and Trade
  • HM Treasury
  • The Department for Energy Security and Net Zero
  • The Department for Science, Innovation and Technology
  • The Information Commissioner’s Office
  • Ofcom
  • Ofgem
  • The Financial Conduct Authority
  • The Competition and Markets Authority
  • TechUK
  • Innovate Finance
  • Icebreaker One
  • Citizens Advice
  • The Coalition for a Digital Economy (COADEC)
  • Open Data Institute
  • Ctrl-Shift
  • Open Banking Implementation Entity (OBIE)
  • The Investing and Saving Alliance (TISA)

What will the Smart Data Council do? 

The Smart Data Council believes that the loyalty penalty situation could be improved by harnessing 'smart data'. This involves the 'secure sharing of customer data with authorised third parties to help improve services for consumers'.

By adopting smart data, the government believes that it will be 'easier for more consumers and small businesses to switch providers of some utilities, therefore supporting families to save money'. 

Speaking about the Smart Data Council, Business and Trade Minister, Kevin Hollinrake, said: 

“Smart Data can be a real game changer for consumers across the UK, potentially saving people hundreds or even thousands of pounds a year.

"Our new Smart Data Council will build on the success of Open Banking and spearhead measures in sectors like SME finance, energy and telecoms, increasing competition and putting more money in the pockets of consumers and small firms.”

You could save by switching today

Although the recommendations made by the Smart Data Council could save households hundreds of pounds a year, any changes could take years to properly take effect. 

As a result, if you're currently out of contract or your current deal is about to come to an end, the best way of reducing your bills is to switch to a new provider today. 

So, take a look at our best broadband deals page and find the best options in your area. Alternatively, pop your postcode into the widget below. We can show you all the best deals in only a couple of clicks. 

Tom Brook

Tom is a freelance copywriter and content marketer with over a decade of experience. Originally from an agency background, he is proud to have worked on campaigns for a number of energy providers, comparison sites and consumer brands.